Federal energy regulators could give another chance to a Trump administration proposal aimed at helping struggling coal-fired and nuclear power plants, according to Height Capital Markets analysts.
The Federal Energy Regulatory Commission in January rejected the proposal that could have added $1 billion to $4 billion annually to consumers’ electricity bills in order to provide higher revenue to plants in danger of closing.
But FERC is now getting a new leader, after President Donald Trump on Wednesday designated Commissioner Neil Chatterjee as the regulatory body’s chairman. Chatterjee is stepping in for Kevin McIntyre, who said he had experienced a serious health setback that left him unable to do the chairman job.
The biggest difference between fellow Republicans Chatterjee and McIntyre is perhaps that they differ in their takes on the plan aimed at aiding the ailing plants, Height analysts Katie Bays and Josh Price said in a note Thursday.
While the commission in January ruled unanimously that the Trump administration hadn’t provided enough evidence that the measures proposed were needed, Chatterjee indicated at that time that he would support some kind of intervention in principle, Bays said in an interview. “Neil really stuck out as the only individual on the commission who had any kind of appetite to discuss subsidies,” she said.
“And it’s very likely that FERC will have another commissioner within the next few months in Bernard McNamee who will maybe be similarly inclined toward slightly less markets oriented, a little more of an interventionist policy,” Bays told MarketWatch. McNamee, an Energy Department official who helped pitch the plan to aid the coal and nuclear plants, was nominated this month to fill a vacant seat on the commission.
“It doesn’t give you a majority per se, but it is an interesting and important shift in leadership at FERC,” the Height analyst added.
McIntyre, the departing chairman, holds a traditional GOP view that there shouldn’t be subsidies for coal and nuclear plants that are struggling to break even, and while he was in that job, FERC was unlikely to put a big focus on that, according to Bays. With Chatterjee taking the helm, the matter appears on track to get attention in 2019, as the chairman typically decides where the commission is going to spend its time, she said. The new FERC leader was previously an energy adviser to Senate Majority Leader Mitch McConnell, a Kentucky Republican.
This report was first published on Oct. 25, 2018.
